Verisk Leverages AWS Cloud Financial Management Services to Better Understand and Govern Costs

Verisk provides predictive analytics and decision-support solutions to customers in insurance, energy and specialized markets, and financial services in 34 countries. They deliver responsible data analytics in pursuit of their customers' most strategic opportunities.

By leveraging AWS Cloud Financial Management solutions, Verisk gained transparent access to cloud resource usage and cost analytics. The company uses AWS Budgets to help set cloud budgets and track actual expenses, Amazon Athena and Amazon QuickSight to query and visualize the AWS Cost & Usage Report, and AWS Cost Explorer to support cost trends analysis.

Following rapid company expansion through acquisitions and organic growth, Verisk Analytics launched a multi-year plan to migrate workloads from on-premises data centers to Amazon Web Services (AWS). The company made this move to leverage the cloud’s scalability in support of rapid growth objectives that could otherwise be challenging to achieve.

As part of the migration initiative, Verisk established a FinOps team to deliver cost transparency and optimize costs in the cloud in support of the Verisk business units. “We drive our business unit stakeholders to work towards a unit cost by project or by customer,” says Lori Galella, who manages the Verisk FinOps team under the guidance of director Vinnie DeAngelis. “This enables our teams to make more accurate business decisions, and we help the business units reduce cloud fees by driving adoption of more cost-effective services, optimal configurations, and diligent clean-up practices.”

Verisk currently has a significant number of AWS accounts managed by 20 business units. One of the challenges Galella and her team faced in attempting to optimize the company’s use of AWS was the variation in IT environments in many business units. “But with in-depth knowledge of how we can tune AWS services, we have been successful in identifying opportunities to reduce our cloud spend,” Galella says.

To help deliver cost savings to the business, Verisk closely follows the AWS Cloud Financial Management framework and the guidance that AWS financial management experts provide. The framework offers guidelines and tools that help govern and optimize AWS expenses that enable Verisk to generate reports about resource costs and usage.

Verisk uses AWS Budgets to set cloud spending targets and then tracks actual cost and usage against the budget thresholds. The company also incorporates the AWS Cost & Usage Report (AWS CUR) for a deeper dive into the data and metadata about AWS services. This makes it possible to map resource expenditures to actual users, teams, and projects. Another key tool is AWS Cost Explorer—for visualizing, understanding, and forecasting resource usage over time.

With Amazon Athena, Verisk queries data from AWS CUR by using standard SQL. The company also taps into Amazon QuickSight to display business intelligence insights through custom dashboards for business unit consumption. Galella’s team was able to build the dashboards quickly by leveraging the Cost Intelligence Dashboard templates provided by AWS Well-Architected Labs and the Amazon CUDOS team.

By using the Cloud Financial Management services, the Verisk FinOps team has the insights to provide internal recommendations. “We conduct bimonthly review meetings with each business unit to present their cloud usage and expenses, analyze trends, and make optimization recommendations,” Galella explains. “We also present tangible action plans for managing AWS spend by service and by account.”

As part of the monthly reviews, Galella and her team point out AWS services that can assist the business units in controlling cloud expenses. For example, Amazon WorkSpaces makes it possible to switch the running mode for virtual desktops from always-on to auto-stop. An early example of this switch allowed one team to reduce monthly WorkSpaces costs by $4,000.

The team also uses the Amazon Simple Storage Service (Amazon S3) Storage Lens dashboard to identify non-current object versions. They then push business units to adopt current object versions or to expire any non-current versions. This controls the proliferation of objects and can reduce Amazon S3 spend by thousands of dollars each month for a business unit.

Galella’s team also leverages the monthly business report analysis tool produced by AWS to identify concerning trends. Verisk notes these trends as opportunities for improvement on anything from Amazon Elastic Compute Cloud (Amazon EC2) instance choices to idle Elastic Load Balancing resources so the company does not accrue any unnecessary costs.

Verisk is all about enabling decision-making at the edge, so Galella’s team provides business units with the flexibility to choose which cost-optimization measures they want to apply. “The business unit cloud architects are the ones that know their environment best and can evaluate the measures that make sense based on the data we provide,” says Galella.

Other techniques that reduce cloud fees include right-sizing server instances and removing unattached Amazon Elastic Block Store (Amazon EBS) volumes. And Verisk is currently driving the move to next-generation, solid-state drive volumes in Amazon EBS that offer a 20 percent cost savings compared to the previous generation of volumes.

Verisk is also exploring multiple use-cases for AWS Graviton Processor in its Amazon EC2 instances—with the expectation of saving a baseline of 20 percent before performance gains are factored in. In addition, Verisk monitors cloud costs using the billing alarm feature provided by Amazon CloudWatch, which generates alerts if expected costs exceed parameters.

“More optimization opportunities come from the centralized management and purchasing of Savings Plans with a three-year commitment,” DeAngelis adds. “The three-year commitment gives us a deeper discount on our Amazon EC2 spend that can be used across all linked accounts while maintaining flexibility in changing the instance family and size.”

A recent Verisk success is the data center exit project for the company’s Wood Mackenzie business unit, an energy intelligence firm. “Faced with hundreds of systems to migrate, it became apparent quickly that a lift-and-shift approach would not have been cost-effective,” says Giacomo Lozito, vice president of application operations for Verisk.

To solve this challenge, Wood Mackenzie migrated the client portal and more than 400 associated systems to AWS within a year by carefully choosing a cost-effective re-platforming and re-architecting approach. “When working in the cloud, and especially for a project of that complexity,” Lozito adds, “the financial insights are just as important as the technical insights. Teaming with the Verisk FinOps team was very important. By establishing a fast feedback loop over the cost-effectiveness of the technologies we chose, we achieved meaningful savings over the hosting cost of the applications in the data center.”

“This is the model we want to see,” concludes Lozito. “We can promote innovation by letting our bright minds loose. At the same time, we can reinforce a culture of accountability—where success doesn’t just mean modern and fast technology, but also business-sustainable technology.”

For other businesses making the migration from on-premises data centers to the cloud, DeAngelis points out Verisk has lowered overall IT expenses in comparison to the self-managed on-premises infrastructure model. And Galella adds, “AWS provides expert advice, pricing transparency, and the tools we need to optimize the costs of our environment while ensuring we continue to deliver the application performance we require.”